This week, Next Issue Media released a new Android tablet newsstand for magazines from equity partners Condé Nast, Hearst, Meredith and Time Inc. According to NIM, an iPad version will be submitted to Apple's App Store in roughly six weeks. For the first time, customers can subscribe to unlimited reading of as many as 32 titles from five different publishers through one app, with one user interface, at one price.
We've now had plenty of magazine apps and even some efforts at UI standards, depending on the device. Next Issue even brought out its first batch of magazines for Android tablets almost a year ago, offering seven titles from four publishers. Next Issue CEO Morgan Guenther now refers to that soft launch as a "beta preview," a proof-of-concept to kick the tires for what the joint venture is offering now.
"If you look at where we started in June of 2010 to today, there's been a ton of innovation," says Guenther. "But about 95 percent has been on the hardware and operating system side. We went from iPad 1 to iPads 2 and 3, FroYo to Gingerbread, Honeycomb, and Ice Cream Sandwich. The Kindle Fire and Nook have sold a ton of tablets. But where is the consumer innovation?"
That's why the all-you-can-eat pricing model is what's attention-worthy here. Ten dollars per month ("Unlimited Basic") fetches access to all the monthlies and biweeklies in the catalog (Popular Mechanics, Vanity Fair, Real Simple, etc.); $15 ("Unlimited Premium") adds weeklies like Entertainment Weekly, People, Sports Illustrated, The New Yorker and Time for an extra $5. $180 annually may be a lot of money, but that's a lot of magazines.
(Disclosure: Wired isn't included in the initial group of NIM magazines, but other titles from our publisher Condé Nast are, and Condé Nast is a partner in the NIM joint venture.)
Next Issue also offers single issues, subscriptions to individual titles, and comped digital copies for current print subscribers – all things most of us are familiar with from existing mags for iOS or Android. The cross-title, cross-platforms subscriptions for a flat rate are the high-order bit.
What's more, Guenther says the $10 and $15 price points are unlikely to change even as more titles from NIM's publishing partners are added. "We'd never say never, but we feel very good about those prices," Guenther told Wired. "If you look at similar offerings in other media, with Netflix at $7.99 and Spotify at $10, or what HBO costs, we think we look pretty good."
Time, Inc. Executive VP Steve Sachs agrees. "We know from other content categories what happens when you introduce a new offer to consumers to buy on an unlimited basis rather than piece-by-piece," Sachs told me. "Not only do they find benefit in that model, they consume more in that category.
"This is really about driving adoption of digital magazines to create a rising tide for the entire category," added Sachs. "Our philosophy is that as a market leader in magazines, as that tide goes up we'll get our share."
It's a typical Silicon Valley start-up strategy: Price for fast growth in the market and figure out how to finesse the profit and revenue side later. (It helps that Guenther and most of the engineering team at NIM are based in Palo Alto.)
It's just the opposite of typical media start-up content. It's not user-created or leveraging the "long tail" of niche publications or the back catalog. (NIM also has offices near its publishing partners in New York.)
Instead, it's a return to content's "short head" — you know, the other segment on the curve where you find big volume. NIM's first 35 titles, Guenther says, already have a mostly print readership of 350 million, with $8 billion in ad revenue.
This is a pretty big deal. It's a little like if Hulu Plus just included every new show from the four networks, HBO, Showtime, Disney, AMC and ESPN. Or to use a different metaphor: this is a cable subscription for the most popular magazines in the world.
By partnering together, the magazine publishers (plus News Corp., who has a stake in the joint venture but doesn't yet have a title in the mix) don't just get more eyeballs on tablet editions and a little more revenue. They also get the chance to experiment with new business models and delivery mechanisms.
After all, the biggest reason to try to grow digital magazine readership quickly is to grow digital advertising buys. But Guenther and NIM want to offer something more to advertisers than just more numbers, like better targeting and bigger reach.
"Right now, there's no scale in digital magazines for advertising," says Guenther. Currently, magazine titles sell their own ads for tablets, usually for all platforms (iPad, Android, Kindle, Nook, etc.), often bundled with print and/or web buys.
"With our platform, we have the capabiliity of showing cross-title engagement," Guenther adds. "Instead of 18- to 34-year-old-males all going into individual apps, we can do group sales to reach that same guy over at Wired or Esquire, etc."
Sachs at Time sees cross-publisher ad sales as "a ways down the road": Next Issue's partners could definitely "create a network offering that advertisers might find compelling. It would probably be a little different from what Hulu does now. It's not really a focus of our strategy right now – maybe a year or two down the road"
For Sachs and Guenther, the real opportunity for advertising and subscription is to deepen engagement from existing readers, help move heavy readers of one title to another they might not have thought to read, and to help open up the category to light magazine readers who may not subscribe to any titles at all.
A big part of that is reducing friction. "Right now, in all of our app stores," says Sachs, "if a customer wants to read multiple magazines, have to download an app every time they want to read that title for the first time." Apple's made things somewhat better on the discovery side with a separate "newsstand section," but you still need to download an app for every title. It may not seem like a big deal, but every click matters.
Here as elsewhere, Guenther likes to look ahead. "For magazines, I think the native App Store is an interim solution for what will ultimately be all browser-based buying and reading," he says.
Guenther makes with an analogy with TiVo, where he was president before joining NIM. "We always used to say, performance is better on the edge. We laughed at the cable companies doing streaming video, because they had to build all this cloud infrastructure to play the same HD content we were storing locally. But if you look now, HD streaming video is getting there.
"In 18 to 24 months, it'll be the same with magazines," he adds. "HTML5 templates and standards, the cloud infrastructure, wireless speeds, the devices will all get better. And with these new Retina Displays, you're looking at 50MB per page. At some point, you have to leapfrog this whole thing. It's shaking everything up. Luckily, we think the big guys see it."
And here as elsewhere, Time's Sachs is a little more rooted in the present. "App stores will continue to be a significant part of the retailing experience," he says. "Customers love them. Apple, Google Play and Amazon are digital superstores. They're one place to go to find everything. That won't change. But when the technology gets there, so we can get real design and layout fidelity, we think HTML5 will be absolutely a new option our customers will find convenient."
Here's my prediction: Within two years, we won't call newsstands like Next Issue's "a Netflix for magazines" because it's one price for a big catalog of content. We'll call it "a Netflix for magazines" because instead of mail delivery or bulky downloads, the primary delivery mechanism will be streaming high-definition, through-designed magazines over the web.
Then we get into the stuff that's really fun for Guenther. How do I do search? What about individual article discovery? Where are the recommendations? What does personalization look like in magazines? How do we interact with social media and the open graph? You don't need to go to HTML web magazines to add these elements, but they all point in that same web-native direction.
They also all point to bringing magazines back to the center of public attention, social conversation and private enjoyment.
"At a high industry level," Guenther says, "our job is to start to turn around the decline of magazine readership as a slice of people's leisure time. With digital technology, web consumption has gone up, TV consumption has gone up, social media, and so forth – and a chunk of that has been at the expense of magazines."
In Guenther's mind, on top of efforts like NIM's, a few things will help grow the share for magazines:
Tablets that reach price points that are accessible to everybody. "Everybody in the developed world can find and read magazines," says Guenther. "We need to make that the same in the digital world." But how do we get there?
Google doubling down on the Android tablet category. "We hear their new tablet will ostensibly be priced at $150, Guenther says. "Some guys can afford to subsidize, and Google is one of them."
More devices with more firepower from Amazon and Barnes & Noble. "We're told Amazon has two or three new Kindle Fire devices in the works right now, and we suspect they're all running Android built on Honeycomb or above," says Guenther. "When the Fire comes out with something that can run us, we'll be all over that."
The next generation Nook tablet, too, brings millions of magazine readers, including lots of upper-middle-class women, a demographic any magazine publisher wants to reach.
In short, even though people joke about the nonexistence of the Android tablet market, Next Issue had many very good reasons for starting with Android tablets as well as iOS. The greater market of Android-compatible reading devices can and likely will get very big in a hurry.
I'm also thinking (and probably will be thinking for a while) about the findings in this week's Pew Research Center report on the rise of e-reading.
The two big takeaways of the Pew Report are, first, that more people are reading on digital devices than ever, including a bump from 17 percent to 21 percent of respondents over the recent holidays alone. The second is that people who read on digital devices read more, both digitally and in print.
There are methodological issues with the report that keep me from drawing grand conclusions even in e-books, let alone another publishing category. But it's clear that in magazines as well as books, digital technology offers substantial opportunities for both growing share among casual readers and deepening relationships with intensive readers.
It offers those opportunities to both readers and publishers if both parties choose to take them.
This is important, because the only group that's probably more fickle than magazine publishers are magazine readers, particularly once you enlarge that sphere to include the entire digital world.
Unlike books, a lot of magazine content is already on the web legally and for free, being sold against ads as we speak. Will customers pay $10 to $15 per month for magazines they may or may not read, when the competition for that last $10, whether from Netflix, Spotify, HBO or anyone else, is already so fierce?
Alternatively, what if instead of enabling new attachments, Next Issue's gigantic pool of content simply erodes customers' already fraying attachment to magazine brands? What does that do, not just to advertising, but to the still-emerging range of vertical opportunities within brands, from stores to conferences?
What happens if or when I stop being a Wired reader and become an 18 to 34 male?
Nobody knows. We're discovering it now, readers and publishers and advertisers, together.
